THAILAND

Presented by Eric Estrella, Toni Narciso, and Ariane Tan

The Kingdom of Thailand

Known as Siam until 1939
The only Southeast Asian country never to have been colonized by a European
country
Traditional founding in 1238
51st country in the world in terms of total area
Total area of 513,120 sq km
Bordered by Cambodia, Burma, Laos and Malaysia
A constitutional monarchy was established in 1932 through a
bloodless revolution
Interim military-run government since May 2014

The Thai People

68,200,824 (as of July 2016)

21st most populous country in the world
Thai (singular and plural)
Thai 95.9%, Burmese 2%, others 1.3%, unspecified 0.9% (as of 2010)
Thai 90.7%, Burmese 1.3%, others 8% (as of 2010)
English as the second language of the elite
Buddhist (official) 93.6%, Muslim 4.9%, Christian 1.2%, others 0.2%, none
0.9% (as of 2010)

The Thai Economy

GDP (purchasing power parity)
$1.108 trillion (2015)
$1.078 trillion (2014)
$1.069 trillion (2013)
21st in the world
GDP (per capita)
$16,100 (2015)
$15,700 (2014)
$15,700 (2013)

The Thai Economy

46th country in terms of ease of doing business
3rd among ASEAN member states
78th country in terms of starting a business
Labor force of 38.55 million (as of 2015)
GDP composition by end use (as of 2015)
Household consumption 51.5%
Government consumption 17.2%
Investment in fixed capital 24.9%
Investment in inventories -5%

The Thai Economy

Human Development Index
93rd in the world (2014)
4th in ASEAN
Considered as having a High Human Development Index (Very High to
Low)
0.726 (2014)
0.724 (2013, 71st)
0.723 (2012)
0.721 (2011)

Thailand Trade Competition Act

The Thailand Trade Competition Act (hereinafter called the Competition Act)
began with the enactment of the Price Fixing and Anti-Monopoly Act of 1979.
The 1979 Act consists of two parts: the price fixing part and the anti-monopoly
part.
The anti-monopoly part of the 1979 Act is aimed at promoting fair competition.
It empowers the Central Committee to look after business structures that may
create monopoly and conduct restrictive business practices.

Thailand Trade Competition Act

Since the Act created problems for enforcement, the Department of Internal Trade,
which is in charge of the Act, made an adjustment to the Act by separating it into
two Acts :
The Price of Goods and Services Act, and the Competition Act
The Competition Act came into effect on April 30, 1999

Scope and Exemptions

Scope: Business Operators within the territory of Thailand (Section 3)
Exemptions:
Section 4: This Act shall not apply to the act of:
(1) Central administration, provincial administration or local administration;
(2) State enterprises under the law on budgetary procedure;
(3) Farmers' groups, cooperatives or cooperative societies recognised by law and having
as their object the operation of businesses for the benefit of the occupation of farmers;
(4) Businesses prescribed by the Ministerial Regulation, which may provide for
exemption from the application of this Act in whole or only in respect of any provisions
thereof.

Prohibited Acts

Monopolies and Abuse of Dominant Market Position

Anticompetitive Mergers
Anticompetitive Agreements (Cartels)
Anti-Monopoly or a Reduction of Competition
Unfair Trade Practice

Monopolies and Abuse of Dominant Market Position

Section 25. A business operator having market domination shall not act in any of the
following manners:
(1) unreasonably fix or maintain purchasing or selling prices of goods or services;
(2) unreasonably fix compulsory conditions, directly or indirectly, requiring other
business operators who are his customers to restrict services, production, purchase
or distribution of goods, or restrict opportunities in purchasing or selling goods,
receiving or providing services or securing credits from other business operators;

Monopolies and Abuse of Dominant Market Position

(3) suspending, reducing or restricting services, production, purchase, distribution,
deliveries or importation without justifiable reasons, destroying or causing damage
to goods in order to reduce the quality to that lower than the market demand;
(4) intervening in the operation of business of other persons without justifiable
reasons.
Note: No exemptions

Anticompetitive Mergers
Section 26. A business operator shall not merge businesses, which may result in
monopoly or unfair competition as prescribed and published in the Government
Gazette by the Commission unless the Commission's permission is obtained.
The publication by the Commission under paragraph one shall specify the minimum
amount or number of market share, sale volume, capital, shares or assets in respect
of which the merger of businesses is governed thereby.

Anticompetitive Mergers
The merger of businesses under paragraph one shall include:
(1) a merger made by a manufacturer with another manufacturer, by a distributor
with another distributor, by a manufacturer with a distributor, or by a service
provider with another service provider, which has the effect of maintaining the
status of one business and terminating the status of the other business or creating a
new business;
(2) a purpose of the whole or part of assets of another business with a view to
controlling business administration policies, administration and management;

Anticompetitive Mergers
(3) a purpose of the whole or part of shares of another business with a view to controlling
business administration policies, administration and management;
The application by a business operator for the permission under paragraph one shall be
submitted to the Commission under section 35.
Note: Under Sec. 37(1) of the Act, a merger can be authorized, provided that it is
reasonably necessary in the business, beneficial to business promotion, has no serious
harm to the economy and has no effect on due interests of general consumers. Also,
under Sec. 37(2), mergers may be approved under conditions.

Anticompetitive Agreements (Cartels)

Section 27. Any business operator shall not enter into an agreement with another
business operator to do any act amounting to monopoly, reduction of competition or
restriction of competition in the market of any particular goods or any particular
service in any of the following manners:
(1) fixing selling prices of goods or services as single price or as agreed, or restrict
the sale volume of goods or services;
(2) fixing buying prices of goods or services as single price or as agreed, or restrict
the purchase volume of goods or services;

Anticompetitive Agreements (Cartels)

(3) entering into an agreement to have market domination or control;
(4) fixing an agreement or condition in a collusive manner in order to enable one
party to win a bid or tender for the goods or services or in order to prevent one party
from participating in a bid or tender for the goods or services;
(5) fixing geographical areas in which each business operator may distribute or
restrict the distribution of goods or services therein or fixing customers to whom
each business operator may sell goods or provide services to the exclusion of other
business operators from competition in the distribution of such goods or services;

Anticompetitive Agreements (Cartels)

(6) fixing geographical areas in which each business operator may purchase goods
or services or fixing persons from whom business operators may purchase goods or
services;
(7) fixing the quantity of goods or services which or to which each business
operator may manufacture, purchase, distribute, or provide services with a view to
restricting the quantity to be that lower than the market demand;
(8) reducing the quality of goods or services to a level below that of previous
production, distribution or provision, whether the distribution is made at the same or
at a higher price;

Anticompetitive Agreements (Cartels)

(9) appointing or entrusting any person as a sole distributor or provider of the same
goods or services or those of the same kind;
(10) fixing conditions or procedures in connection with the purchase or distribution
of goods or services in order to ensure the uniform or agreed practice.
In the case where it is commercially necessary that the acts under (5),(6),(7),(8),(9)
or (10) be undertaken within a particular period of time, the business operator shall
submit to the Commission under section 35 an application for permission.
Note: with exemptions

Anti-Monopoly or a Reduction of Competition

Section 28. A business operator who has business relation with business operators
outside the Kingdom, whether contractual or through policies, partnership,
shareholdings or in the form of relation of any other similar description, shall not
carry out any act in order that a person who is in the Kingdom and intends to
purchase goods or services for personal consumption will have restricted
opportunities to purchase goods or services directly from business operators outside
the Kingdom.
Note: No exemptions

Unfair Trade Practice

Section 29. A business operator shall not carry out any act which is not free and fair
competition and has the effect of destroying, impairing, obstructing, impeding or
restricting business operation of other business operators or preventing other persons
from carrying out business or causing their cessation of business.
Note: No exemptions

Threshold Requirements
Prohibited Mergers and Acquisitions
Prior to or after the merger, the businesses have market shares equivalent to or
exceeding 30% and total revenues in the previous year equal to or exceeding 2
Billion Baht in any product or service; or
With respect to an acquisition of voting shares, the above thresholds are met
and:
With respect to a public limited company, the acquisition reaches or
exceeds 25% of all voting rights;
With respect to a private limited company, the acquisition reaches or
exceeds 50% of all voting rights.

Threshold Requirements
Monopolies and Abuse of Dominant Market Position
Business operators have a dominant position when the following thresholds are met:
Market share exceeding 50% and a turnover of at least 1,000 million THB in the
previous year;
Top 3 BOs with combined market shares exceeding 75% and a turnover of at
least 1,000 million THB in the previous year, except business operators whose
market share is less than 10% or whose turnover is less than 1,000 million THB
(Sec. 3 of the Act in relation to the Notice on Dominant Business Operators
with Market Domination).
Note: The act includes both single and collective dominance.

Threshold Requirements
Monopolies and Abuse of Dominant Market Position
Section 30. The Commission shall have the power to issue a written order requiring a
business operator who has market domination, with the market share of more than 75% to
suspend, cease, or vary the market share. For this purpose, the Commission may prescribe
rules, procedure, conditions and time limit for compliance therewith.

Enforcement Body
The Competition Commission (hereinafter called the Commission) is
responsible for the enforcement of the Act.
It consists of
the Minister of Commerce as Chairman,
the Permanent-Secretary of the Ministry of Commerce as Vice-Chairman,
the Director-General of the Department of Internal Trade as Member and
Secretary, and
the Permanent-Secretary of the Ministry of Finance, and no more than twelve
other qualified persons as members,

Enforcement Body
These qualified persons appointed as members must not be
political members,
holders of political positions,
executive members or holders of positions with the responsibilities in the
administration of political parties.
They shall hold office for a term of two years and not more than two
consecutive terms in case they are re-appointed.

Enforcement Body
The Commission shall have the powers and duties
to consider complaints,
to prescribe rules for dominant position,
to consider an application for permission to merge business,
to initiate the joint reduction or restriction of competition, or
to give orders for suspension, cessation, correction, or variation of activities by
business operations.

Penalties
Failure to abide by the provisions of the Competition Act could result in
jail terms of between one to three years and/or
fines ranging from two to six million baht.
Under the Act, such penalties may be applied
not only to the enterprises
but also to their managing partner or person in charge of operations, unless
the offence at stake was committed without his/her knowledge or consent
and/or
reasonable measures were taken to prevent such offence.

Commission's Rulings
During the first seven years of the TCA, only three cases have been ruled upon by
the Commission
UBC Case
Beer-Whiskey Tying Case (Chang Beer Case)
Honda Case

Proposed Amendments
The amended Act introduces more stringent and extensive provisions:
The definition of "business operator" is broader.
Violations committed outside Thailand are punishable. Any violations that have an
anticompetitive effect on Thailand would be punishable in Thailand.
The OTCC must be notified of certain merger activities.
Criminal penalties will be adjusted.
The OTCC, at its discretion, may decrease the fines imposed on business operators.
State enterprises will be subject to the Act.
State enterprises that are subject to the Act and engage in anticompetitive practices may
incur both criminal and civil penalties.

Proposed Amendments
The definition of "market dominant operator" (MDO) will be reviewed and revised at
least once every five years. The OTCC is empowered to determine the criteria to be
classified as an MDO.
If a business operator is classified as market dominant, its obligations and scrutiny
under the Act would be higher.
Companies face much heftier fines for violations of the new Act.

THE END